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2012 (12) TMI 856 - HC - Central ExciseDemand u/s 11D - Reversal of cenvat credit and collected the same from the purchasers - The Department was of the opinion that the entire transaction was irregular, was in breach of the Cenvat Credit Rules, as applicable from time to time. As per Section 11D of the Central Excise Act, therefore, the respondent was liable to refund such amount. - Held that:- The view of the Tribunal that in any case the respondent could have encashed the unutilized credit in the Cenvat account and that therefore the same did not make any difference to the Department, in our view, suffers from fallacy. Firstly, as noted, Rule 5 of the Rules, 2004 permitted refund of Cenvat credit under certain circumstances which provides that such refund shall be allowed subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification. It can, thus, be seen that grant of refund is neither automatic nor a matter of course. Nothing has been brought on record to suggest that the respondent was entitled to such refund as a matter of right. Secondly, utilization of Cenvat credit for the purpose of payment of unauthorizedly collected so called excise duty was not permissible under the Rules. The contention of the Department that by doing so, the respondent passed on Cenvat credit to the purchaser to be availed by them ultimately which credit such purchasers were not entitled to, cannot be brushed aside. Regarding period of limitation - held that:- Section 11D of the Central Excise Act does not provide any rigid time limit. In such cases, as so long as the recovery proceedings are initiated within reasonable time, the same cannot be struck down only as time-barred. Demand u/s 11D confirmed - Order of Tribunal reversed - Decided in favor of revenue and against the assessee.
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